NEW YORK – U.S. stock index futures fell late on Tuesday, as results in the presidential race trickled in.
S&P 500 futures fell 13.2 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures lost 111 points and Nasdaq 100 futures fell 13 points.
Early voting results point to a status quo result, with President Barack Obama re-elected, Democrats retaining control of the Senate, and the House of Representatives staying in Republican hands.
With TV networks projecting wins in Wisconsin, New Hampshire and Minnesota, Obama is making the path to victory harder for Republican contender Mitt Romney.
"Rumors floated in the market that the polls were skewed and Romney was going to win and I think that may have sent the market up," said John Canally, investment strategist and economist at LPL Financial in Boston. "Now that the polls are showing that President Obama will win or that it's too close to call, that may be a part of it (the decline in futures)."
Cash markets posted strong gains earlier despite a string of weaker-than expected results from U.S. companies, with notable strength in stocks and sectors that are seen as favorable if Romney wins, including coal, energy and defense shares.
Heavy betting has been seen in the options market so far this week on stocks that would specifically benefit from either an Obama or Romney win, such as health care and energy shares. Several different stocks are expected to show large moves in coming days, according to JP Morgan derivatives strategist Marko Kolanovic.
The results of this year's elections will play a crucial role in how disagreements over spending, taxes, healthcare and other policies are dealt with through 2016.
The U.S. fiscal cliff, the $600 billion in spending cuts and tax increases that are set to expire at end of the year, has been weighing on the market for months. It threatens to bring on another recession unless the budget is successfully renegotiated.
(Reporting by Rodrigo Campos; Editing by Leslie Gevirtz)